U.S. stock markets closed lower on Thursday, weighed down by disappointing economic data and concerns over President Donald Trump’s tariff threats, which rattled European markets.
U.S. jobless claims came in at 242,000, surpassing the expected 221,000, which contributed to a more cautious sentiment among investors. The S&P 500 fell 1.59%, closing at 3,861.57 points, while the Nasdaq plunged 2.78%, marking its largest one-day drop in a month, ending at 18,544.42 points. The Dow Jones Industrial Average saw a loss of 0.45%, finishing at 43,239.50 points after earlier gains.
Tech stocks were notably affected, with Nvidia, a key player in AI and semiconductor markets, seeing its shares drop over 4% despite a strong earnings report. Investors were more focused on broader market conditions and rising concerns about trade policy, which overshadowed Nvidia’s promising outlook.
In Europe, the STOXX 600 index lost 0.5%, retreating from a record high set the previous day, as automaker stocks faced pressure following Trump’s threat of a 25% tariff on European cars. This weighed on European shares across the board, with the automaker sector hit hardest.
“The overwhelming flow of news has traders uncertain about what to focus on, particularly when it comes to Trump’s policy shifts,” said Michael Brown, senior research strategist at Pepperstone. “Given the uncertainty, it’s understandable that investors are reducing their exposure to riskier assets.”
The U.S. President further confused markets on Wednesday by suggesting that tariffs on Canada and Mexico could be delayed until April 2, only for a White House official to later clarify that the March 4 deadline remained in effect, adding to the volatility surrounding U.S. trade policy.
Meanwhile, U.S. Treasury yields saw mixed movements. The yield on the benchmark 10-year note rose by 1.7 basis points to 4.266%, while the 2-year note yield dropped slightly to 4.059%. Traders are increasingly pricing in the possibility of Federal Reserve interest rate cuts later this year, with some expecting two quarter-point reductions starting in July.
The dollar, which has faced pressure recently, gained 0.79%, driven by concerns over U.S. economic growth. Traders are watching Friday’s release of the Personal Consumption Expenditure (PCE) index, the Federal Reserve’s preferred inflation measure, for further signals on inflation trends.
The oil market saw a surge, with Brent crude climbing 2.1% to $74.04 per barrel and U.S. West Texas Intermediate crude rising 2.5% to $70.35, fueled by renewed supply concerns after President Trump revoked Chevron’s license to operate in Venezuela.
Meanwhile, gold prices fell, with spot gold hitting a two-week low, pressured by a stronger dollar. U.S. gold futures settled 1.2% lower at $2,895.90. In the cryptocurrency market, Bitcoin dropped 0.70% to $83,804.40 after a sharp 12% decline earlier in the week. Geoff Kendrick, global head of digital assets research at Standard Chartered, advised caution, stating that the market might experience further losses before recovering.
As the global economic outlook grows more uncertain, investors remain cautious, awaiting more data and clearer signals from the Federal Reserve and the White House on trade and monetary policy.
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